Apple 2005 Annual Report Download - page 23

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on August 17, 2005, affirming the trial court’
s decision. The Company filed a Petition for review with the California Supreme Court which was
denied on November 23, 2005.
European Commission Investigation
The European Commission has notified the Company that it is investigating certain matters relating to the iTunes Music Store in the European
Union (EU). The European Commission is investigating claims made by Which?, a United Kingdom (UK) consumer association, that the
Company is violating EU competition law by charging more for online music in the UK than in Eurozone countries and preventing UK
consumers from purchasing online music from the iTunes Music Store for Eurozone countries. The Which? claims were originally lodged with
the UK Office of Fair Trading, which subsequently referred them to the European Commission. The European Commission is investigating the
charges under Articles 81 and 82 of the European Commission Treaty.
Gobeli Research Ltd. v. Apple Computer, Inc., et al.
Plaintiff Gobeli Research Ltd. filed this patent infringement action against the Company and Sun Microsystems, Inc. on April 15, 2004 in the
United States District Court for the Eastern District of Texas, Marshall Division, alleging infringement of U.S. patent 5,418,968 related to a
“System and Method of Controlling Interrupt Processing.” Plaintiff alleges that the Company’s Mac OS 9 and Mac OS X operating systems
infringe Plaintiff’s patent. Plaintiff seeks unspecified damages and other relief. The Company filed an answer on June 9, 2004, denying all
material allegations and asserting numerous affirmative defenses. The Company also asserted counterclaims requesting declaratory judgment of
non-infringement and invalidity. A Markman hearing took place August 9, 2005, and the Court issued a ruling on August 26, 2005 invalidating
one of Plantiff’s two claims. On October 18, 2005, a Stipulation entered into by the parties was filed removing Mac OS 9 from the case. The
trial is scheduled for February 6, 2006.
Goldberg, et al. v. Apple Computer, Inc., et al. (f.k.a. “Dan v. Apple Computer, Inc.”)
Plaintiffs filed this purported class action on September 22, 2003 in Los Angeles County Superior Court against the Company and other
members of the computer industry on behalf of an alleged nationwide class of purchasers of certain computer hard drives. The case alleges
violations of California Business and Professions Code §17200 (unfair competition), the Consumer Legal Remedies Act and false advertising
related to the size of the drives. Plaintiffs allege that calculation of hard drive size using the decimal method misrepresents the actual size of the
drive. The complaint seeks restitution and other relief. Plaintiff filed an amended complaint on March 30, 2004 and the Company filed an
answer on September 23, 2004, denying all allegations and asserting numerous affirmative defenses. Defendants filed a motion to strike
portions of the complaint based on sales by resellers and filed a motion for judgment on the pleadings based upon Proposition 64. The Court
granted both motions at a hearing on April 6, 2005. Plaintiff filed an amended complaint on May 6, 2005. The Defendants filed a demurrer on
June 6, 2005, which was heard on August 22, 2005. The Court granted the demurrer in part and denied it in part. Plaintiff filed an amended
complaint. The Company’s response is not yet due.
Honeywell International, Inc., et al. v. Apple Computer, Inc., et al.
Plaintiffs Honeywell International, Inc. and Honeywell Intellectual Properties, Inc. filed this action on October 6, 2004 in the United States
District Court in Delaware alleging infringement by the Company and other defendants of U.S. patent 5,280,371 entitled “Directional Diffuser
for a Liquid Crystal Display.” Plaintiffs seek unspecified damages and other relief. The Company filed an answer on December 21, 2004
denying all material allegations and asserting numerous affirmative defenses. The Company has tendered the case to several suppliers. On
May 18, 2005 the Court stayed the case against the Company and the other supplier defendants. Plantiffs filed an amended complaint on
November 7, 2005 adding additional defendants and expanding the scope of the accused products. Given the stay, the Company
’s response to
the amended complaint is not yet due.
21